Some economic events influence markets more than others. Traders who follow these key events and spot the right signals often have an advantage and can catch the best trading opportunities. So let’s take a look at some of the major events affecting financial markets this week and see what types of trading signals they can offer.
Wednesday, July 5
21:00 (GMT+3) – USD FOMC Minutes
The Federal Open Market Committee organizes 8 meetings a year. During those meetings, the FOMC goes over economic and financial conditions, determines the monetary policy position, and evaluates the risks to prices stability and sustainable economic growth. The FOMC minutes offer a detailed record of the meeting and provide important insights into the Fed’s look on the market and the economy.
How does this affect trading?
Minutes of the FOMC is usually published 3 weeks after the policy decision. Traders search for clues regarding the policy outlook in this publication as well as the vote split.
When the FOMC minutes point to a higher chance of future rate hikes, it can be interpreted as a positive signal for USD. But if the minutes suggest that future rate hikes are less likely, it can be seen a negative factor for USD.
☝️
⬇️Decreased chances of future rate hikes could be a bearish sign for USD.
Note that the market reaction to FOMC Minutes could be delayed because the media doesn’t have access to the publication before the release.
What’s the forecast?
The Fed left the target for the funds rate unchanged at 5%-5.25% in June but signaled rates may go up to 5.6% by year-end if the economy and inflation don’t slow down more. After the FOMC decision, Fed Chair has reinforced several times the need to raise rates further this year.
Which assets are projected to be affected the most?
- EUR/USD
- GBP/USD
- USD/JPY
Thursday, July 6
04:30 (GMT+3) – AUD Balance of Trades
The Trade Balance shows the difference in value between imported and exported goods and services over the reported period. A positive number means there were more exports than imports.
How does this affect trading?
☝️
What’s the forecast?
The previous Balance of Trades was A$11.158B, and the forecast is A$10.5B.
Which assets are projected to be affected the most?
- AUD/CAD
- AUD/USD
- AUD/JPY
17:00 (GMT+3) – USD ISM Services PMI
ISM Services PMI is an indicator of the overall economic condition for the non-manufacturing sector. It is based on four indicators with equal weights: Business Activity, New Orders, Employment, and Supplier Deliveries.
A reading above 50 shows that the non-manufacturing sector economy is generally expanding, while below 50 shows the non-manufacturing sector is in decline.
How does this affect trading?
☝️
⬇️ A lower than expected reading is bearish.
What’s the forecast?
The previous ISM Services PMI was 50.3, and the forecast is 51.
Which assets are projected to be affected the most?
- EUR/USD
- GBP/USD
- USD/JPY
17:00 (GMT+3) – USD JOLTs Job Openings
JOLTS Job Openings is a survey by the US Bureau of Labor Statistics aiming to measure opportunities in the job market. The survey gets data from employers, including retailers, manufacturers and different offices each month.
When the JOLTS report provides data that is stronger than forecast, it is generally thought positive for the USD. It suggests a healthy labor market with plenty of job opportunities. But when the data is weaker than forecast, it is considered negative for the USD, pointing to potential problems in the labor market.
How does this affect trading?
☝️
⬇️ While a lower than expected reading is bearish for the USD.
What’s the forecast?
The previous JOLTs was 10.103M, and the forecast is 9.9M.
Which assets are projected to be affected the most?
- EUR/USD
- GBP/USD
- USD/JPY
Friday, July 7
15:30 (GMT+3) – USD Non Farm Payrolls
Non farm Payrolls measures the change in the number of employed people during the previous month, excluding the farming industry.
When the Non farm Payrolls report offers a higher number than forecast, it is generally considered positive for the USD. This shows increased employment and points to stronger consumer spending. But when the number is lower than forecast, it hints at weaknesses in the labor market and is considered negative for the USD.
How does this affect trading?
☝️
What’s the forecast?
The previous Nonfarm Payrolls was 339K, and the forecast is 225K.
Which assets are projected to be affected the most?
- EUR/USD
- GBP/USD
- USD/JPY
The release of the Nonfarm Payrolls report can often lead to increased volatility in USD currency pairs.
15:30 USD Unemployment Rate
This Unemployment Rate shows the % of the US workforce that is unemployed and was actively looking for employment during the previous month.
How does this affect trading?
☝️
What’s the forecast?
The previous Unemployment Rate was 3.7%, and the forecast is 3.6%.
Which assets are projected to be affected the most?
- EUR/USD
- GBP/USD
- USD/JPY
16:30 (GMT+3) – CAD Unemployment Rate
This Unemployment Rate shows the % of the Canadian workforce that is unemployed and was actively looking for employment during the previous month.
When the Unemployment rate is higher than forecast, it is generally considered negative for the local currency. It indicates issues in the labor market and suggests lower consumer spending and economic growth. However, if the rate is lower than forecast, it points to improving employment conditions, higher expected consumer spreading and economic growth — positive factors for CAD.
How does this affect trading?
☝️
⬇️ A higher number than the forecast is bearish for CAD.
What’s the forecast?
The previous Unemployment Rate in Canada was 5.2%, and the forecast is 5.3%.
Which assets are projected to be affected the most?
- AUD/CAD
- USD/CAD
- GBP/CAD
You can find the latest news and track these and other major events using the IQ Option Economic Calendar.
How to Use the IQ Option Economic Calendar for Trading?
The Economic Calendar helps traders keep track of significant economic events and indicators that can potentially impact financial markets. It provides a schedule of upcoming releases of vital economic data, such as GDP (Gross Domestic Product) figures, employment reports, inflation rates, central bank meetings, interest rate decisions, and other relevant announcements precisely when they occur.
The Economic Calendar empowers you to plan your trading strategies in advance, effectively managing risk and capitalizing on potential market opportunities. You can also stay on top of major events and get the latest news right from the IQ Option traderoom. Just go to the ‘Market Analysis’ section and spot the trading signals related to your chosen assets.
Still waiting for the right time to start trading? Use these trading signals to beat other traders and get a step closer to reaching your financial goals!
